You Are in Charge of a Project That Has a Degree

question 74

Multiple Choice

You are in charge of a project that has a degree of operating leverage of 2.64. What will happen to the operating cash flows if the number of units you sell increase by 6 percent?

• A)15.84 percent decrease
• B)2.27 percent decrease
• C)no change
• D)2.27 percent increase
• E)15.84 percent increase

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Definitions:

Autonomy

The degree of freedom and independence an individual or entity has to make decisions or take actions without external control or influence.

Client Relationships

The professional connections and interactions between a business and its clients, focusing on communication, trust, and service quality.

Natural Work Units

Refers to a way of organizing work in which tasks are grouped naturally, based on process or workflow, to improve efficiency and job satisfaction.

Feedback Channels

The means by which information regarding performance and expectations is communicated between different levels within an organization.